Stocks - PB ratio

Today, I learnt another new ratio.
It is something that keeps repeating in fool.sg website.
It is the Price to Book ratio, which is the same as Price to Equity ratio.

PE ratio is to gauge if a share is under-valued according to how much it earns.
PB ratio is to see if the stock is under-valued according to how much it possesses.

I wanted to learn the PB ratio, because I want another angle to look at Creative shares.
I cannot grasp a good idea of PE ratio for Creative, as it is making a loss.
But PB ratio can be used for all shares, even those not making a profit.

Creative PB ratio is currently around 0.7, which is good.
As long as it is below a ratio of 1, it is under-valued.
It is like selling an item that is worth 1 dollar for 70 cents.

However, over time, if the company is shit, its loss will diminish its book value.